IN RE IMPLEMENTATION OF SECTION 401E OF 2007 PA 164
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STATE OF MICHIGAN
COURT OF APPEALS
In re Implementation of Section 401e of 2007 PA 165.
COUNTY OF GRAND TRAVERSE, COUNTY
OF MONTCALM, COUNTY OF DELTA,
COUNTY OF HILLSDALE, COUNTY OF
HOUGHTON, COUNTY OF DICKINSON,
COUNTY OF CASS, COUNTY OF CHIPPEWA,
COUNTY OF MENOMINEE, COUNTY OF
TUSCOLA, COUNTY OF CHEBOYGAN,
COUNTY OF EMMET, COUNTY OF CHARLEVIOX, COUNTY OF SAGINAW, COUNTY OF
NEWAYGO, COUNTY OF IONIA, COUNTY
OF GOGEBIC, COUNTY OF OGEMAW,
COUNTY OF MACKINAC, COUNTY OF
ALCONA, COUNTY OF ALPENA, COUNTY
OF HURON,
UNPUBLISHED
April 20, 2010
Appellants,
V
No. 285896
Public Service Commission
Case No. 00-015489
MICHIGAN PUBLIC SERVICE COMMISSION
and TELECOMMUNICATIONS ASSOCIATION
OF MICHIGAN,
Appellees.
In re Implementation of Section 401e of 2007 PA 165.
COUNTY OF VAN BUREN,
Appellant,
V
No. 285964
Public Service Commission
Case No. 00-015489
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MICHIGAN PUBLIC SERVICE COMMISSION
and TELECOMMUNICATIONS ASSOCIATION
OF MICHIGAN,
Appellees.
In re Implementation of Section 401e of 2007 PA 165.
COUNTY OF SAINT CLAIR,
Appellant,
V
No. 286244
Public Service Commission
Case No. 00-015489
MICHIGAN PUBLIC SERVICE COMMISSION
and TELECOMMUNICATIONS ASSOCIATION
OF MICHIGAN,
Appellees.
Before: METER, P.J., MURPHY, C.J., AND ZAHRA, J.
ZAHRA, J (concurring in part and dissenting in part).
I concur in the portion of the majority opinion that affirms the orders of the Public
Service Commission (PSC) adjusting downward the surcharges requested by the various county
litigants for emergency telephone services under the Emergency 9-1-1 Service Enabling Act,
MCL 484.1101 et seq. (the Act). I respectfully dissent from the conclusion reached in the
majority opinion that the PSC improperly treated the formula of 2007 revenues plus 2.7 percent
(as provided in MCL 484.1401e(2)) as a ceiling when adjusting surcharges. I would affirm all of
the orders of the PSC that are the subject of this appeal.
The majority opinion has wrongly interpreted MCL 484.1401e. Pursuant to the plain and
clear meaning of MCL 484.1401e(2), “[i]f the surcharge is rejected, it shall be adjusted to ensure
that the revenues generated do not exceed the amounts allowed under this subsection.” The PSC
rejected the requested surcharges submitted by the complaining counties. The only revenue
formula allowed under subsection 401e(2) is 2007 revenues plus 2.7 percent. Thus, pursuant to
the plain meaning of this statute, the PSC was required to adjust the surcharge to ensure that the
revenues generated do not exceed 2007 revenues plus 2.7 percent.
The majority opinion concludes that because section 401b is mentioned in subsection 2,
the “necessary and reasonable” language from that section is incorporated into subsection 2.
Thus, the majority concludes that the amount allowable under subsection 2 is not “the amount
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received in 2007 plus an amount not to exceed 2.7% of the 2007 revenues[,]” as expressly
provided in subsection 2. Rather, the majority imposes on the PSC a duty “to adjust those
proposed surcharges that were subject to adjustment to levels necessary and reasonable as
discretely determined . . . .” Majority opinion at p 11. Nothing in MCL 484.1401e(2) supports
this outcome.
MCL 484.1401e(2) states:
If the amount to be generated in 2008 exceeds the amount received in
2007 plus an amount not to exceed 2.7% of the 2007 revenues, the commission, in
consultation with the committee, shall review and approve or disapprove the
county 9-1-1 surcharge adopted under section 401b. If the commission does not
act by March 17, 2008, the county 9-1-1 surcharge shall be deemed approved. If
the surcharge is rejected, it shall be adjusted to ensure that the revenues generated
do not exceed the amounts allowed under this subsection. In reviewing the
surcharge under this subsection, the commission shall consider the allowable and
disallowable costs as approved by the committee on June 21, 2005.
The Legislature’s reference to section 401b was only to identify the requested surcharge that the
PSC was required to approve or disapprove. The Legislature did not refer to section 401b to
incorporate any of its provisions into subsection 2. The Legislature further expressly directs the
PSC on its duty in the event the PSC rejects a surcharge sought by a county—to adjust the
surcharge to ensure that it does not exceed the amounts allowed under “this subsection,” which is
subsection 2, and not MCL 484.1401b(2) as the majority maintains. MCL 484.1401e(2). Again,
there is only one formula under subsection 2 that describes the allowable surcharge: “2007 plus
an amount not to exceed 2.7% of the 2007 revenues.” For this reason, I conclude that upon
rejection of the surcharge requested by the counties pursuant to section 401b, the PSC was
obligated to reduce the surcharge to an amount not in excess of 2007 revenues plus 2.7 percent.
I also find no merit to the counties’ claims that the PSC failed to give individualized
attention to each county’s request. The counties bore a heavy burden to establish that the
surcharges sought, to the extent they exceeded 2007 revenues plus 2.7 percent, were necessary
and reasonable. The counties, for the most part relied on budgets, without underlying data
establishing their need, to support their respective claims. However, the mere creation of a
budget does not establish necessity or reasonableness. The PSC’s rejection of these surcharges
should be affirmed.
The counties also argue they were misled by the Commission because they presented
their evidence to the 9-1-1 Committee rather than the PSC. The counties claim the January 2,
2008, order of the PSC limited the proofs they were to present to the PSC to items specifically
referenced in the Act. I disagree. While the January 2, 2008 order requires presentation by
February 15, 2008, of the materials referenced in the Act, nothing in the order limits the counties
from presenting additional materials to support their respective claims. Further, the order and the
Act require this information from any county intending to impose a surcharge, regardless of
whether the surcharge exceeded 2007 revenues plus 2.7%. Common sense dictates that if a
county is requesting imposition of a surcharge that will trigger PSC review and approval,
detailed evidence to substantiate the request should be presented to the PSC.
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This issue aside, the Act requires the PSC to review in consultation with the committee,
at the requests of the counties. Here, the March 3, 2008 order of the PSC that rejects the
counties’ requests references the committee report. Thus, I conclude the PSC considered the
committee report, which considered the evidence presented to the committee by the counties,
before rejecting each county’s request. I therefore conclude the PSC did precisely what it was
statutorily permitted to do—it reviewed and considered each county’s request for a surcharge as
well as the report of the committee and then it rejected each county’s request for a surcharge
calculated to exceed 2007 revenues plus 2.7%. I find no error in the action of the PSC on the
record presented. I would affirm all orders of the PSC issued in this matter.
/s/ Brian K. Zahra
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